Posts Tagged with “EC”

Microsoft has used Windows to make competition in browsers difficult in a variety of ways that aren’t obviously apparent to a consumer. These techniques are generally apparent only to other developers. Some of these will seem small when considered alone. But taken together these add up to a significant burden for other browser makers, and a significant advantage to IE.

Windows has provided technical advantages to IE through techniques such as those listed below. This list is not meant to be conclusive. It is meant to illustrate the range of ways in which Windows can and has made it difficult for other browsers to provide a competitive experience on Windows.

Making information available to IE before or differently than that information is available to others.

Making it difficult for other browsers to access browsing information stored in Windows, thus making migration and syncing painful for users and difficult for other browser makers to implement well. This includes information such as formats and metadata related to IE favorites, website passwords, and website cookies.

IE use of undocumented Windows APIs.

Providing APIs to IE available to Windows developers as part of the “Windows” API. As a result applications developed by third party developers can send URLs directly to IE rather than to the browser the user has selected as his or her choice.

Requiring the use of IE to use the Windows update service. (Microsoft appears to have phased out this practice, or to have provided alternatives. I include it as an illustration of the ways Microsoft has, and could again, use Windows to damage competition in the browser space.)

The ubiquity of Windows brings this artificial competitive advantage for IE to almost every single person using a personal operating system. Redressing this setting will help refocus competition on the merits of the browser itself.

To go further with this principle we should identify all the ways Windows provides technical advantages to IE. If you’ve got examples please feel free to leave them here (we’ll review comments to previous posts for examples already given) or provide them by whatever means you feel comfortable with.

As I look at this principle (“Windows can’t provide a technical advantage to IE”), I’m sure that there will be a set of comments asking (a) why can’t Microsoft do whatever it wants with Windows, and (b) if there are limits on Microsoft, what about Apple? So I’ve added this post to address those questions.

The answer is the monopoly status of the Windows operating system. With over 90% market share for a decade or so, the concern is that this dominance allows Windows to damage the structure of competition. This concern is reflected in anti-trust laws. So this would not apply to Apple unless and until Apple has a monopoly or dominant position with the desktop operating system (today its market share is in the single digits).

It may be that many of the people saying Microsoft should be able to do whatever it wants are both familiar with anti-trust law and reject the entire idea. That’s a different discussion than the one I’m focused on. I’ve focused on two topics that bracket the legal decisions:

Has the integration of IE into Windows damaged competition? Mozilla has more experience in this area than almost anyone (Opera being the other long term competitor), so I feel qualified to address this; and

How do we think about remedies? What kinds of remedies make sense, which are likely to cause unintended consequences?

There’s an obvious question in the middle of these: Does the harm caused by the integration of IE into Windows violate EU competition/anti-trust law? That’s the classic “application of law to the facts of a case” at the heart of a legal decision. I know a lot about the factual difficulties of competing but much less about the precise application of European Union law.

The EC has signaled its preliminary conclusion that the integration does violate EU law and that remedies are likely to be imposed. I feel it’s important to try to have our experience and expertise reflected in the EC’s deliberations. Thus my focus on the difficulties of competing with IE in the current setting, and on the principles that might guide our thinking on remedies.

In the last post I listed potential principles and noted I’d try to say a bit more about each. Here’s the first principle.

Principle: Microsoft must not undermine consumer selection of non-Microsoft browsers.

Rationale: Once a person has chosen Firefox or Opera or another browser this choice should be respected. Neither Windows nor IE should use the presence of IE to encourage or promote a return to IE, or to automatically open a different web browser than that which the user has selected. Otherwise, the monopoly presence of Windows on 90+% of the world’s personal computers means that people are forced to choose alternative products over and over again.

Some Specifics:

Use of IE for operating system purposes cannot bleed into web browsing

IE must close after OS purposes complete

IE may not ask to become the default browser or make itself the default browser except in specified legitimate circumstances, like perhaps when a person downloads IE separately from Windows or from a Windows update

It will be useful to identify the ways in which Microsoft products — including Office, as suggesting in a previous comment — lead people to IE, or open IE as the browser even when another browser has been selected as the default. Feel free to add them here or let me know through other channels.

This post is a list of potential principles derived from the various discussions so far, plus a clarifying example or two for some of the principles. In subsequent posts I’ll say a bit more about each potential principle and how it might be accomplished, though I’ll be equally happy if this post is enough to spur a good discussion.

These are identified as potential principles on purpose; this is not a list of Mozilla recommendations. This list includes a spectrum of potential principles, some of which seem uncontroversial and some of which have already proved highly controversial. We may also find agreement on a principle and a vigorous discussion on how to best implement it. These potential principles are the beginning of a discussion, not the end.

Windows cannot condition a person’s ability to stay secure and/ or update Windows on the use of IE

Microsoft cannot condition a person’s ability to access the MS website or MS services on use of IE

Use of IE for operating system purposes cannot bleed into web browsing

Functionality of the operating system cannot be degraded for users of alternative browsers

2. Windows can’t provide a technical advantage to IE.
An example of what this might mean in practice:

Microsoft must make all API and access points that are available to IE available to other browsers on the same terms

3. Windows must enable people to choose other browsers.
Some examples of what this might mean in practice:

Option to download other browsers must be presented when a user is updating IE

Option to download other browsers must be presented when a user is updating Windows

IE may not ask to become the default browser or make itself the default browser except in specified legitimate circumstances, like perhaps when a person downloads IE separately from Windows or from a Windows update

Windows must ship with alternative browsers installed and offer users a choice

Windows may not include a browser (“untying” required). (This implementation of the principle has some obvious drawbacks for users.)

4. Microsoft’s financial and other incentives to distributors must be browser-neutral.

5. Microsoft must educate people about other browsers (or fines levied against Microsoft should be used to support open source projects and education).

We’ve had a reasonably full discussion of the harm to browser innovation and competition caused by Microsoft’s activities. It’s time to turn to the question of an effective response from the EC. There’s already been a lot of back and forth on possible remedies, but I’d like to start from a different point.

Let’s start by identifying the principles that might underlay any potential remedy: What goal, or principle, do we hope a remedy accomplishes?

Actual remedies can then be derived from these principles. Any remedy is likely to end up being complex, detailed, perhaps procedural, and a topic of long discussions between the EC and Microsoft. We won’t all be able to be involved in these discussions, even if we have the time and focus. We can however, articulate principles that we believe a remedy should meet, that the interested lay person can understand, and that we can use to evaluate the remedies that are ultimately crafted.

This idea sounds sort of reasonable at first, but it’s built on a logical fallacy.

The claim is that the tying of IE to Windows harms competition, innovation and user choice in browsers. Microsoft does not need to be 100% successful for this claim to be true. A single plant growing in a toxic environment does not mean that the environment is suddenly healthy. It doesn’t mean that all concern with the environment should fade or that attempts to improve the environment should be abandoned. That plant may be prosperous, but still deeply constrained by its environment.

Mozilla is extremely healthy, but still constrained by the environment IE has created. We’re constrained in being able to reach people of course, since IE is utterly ubiquitous and hides the possibilities of alternatives. We’re constrained in other ways as well. We’re constrained in our ability to enable new innovations — we need to find ways to make the Internet continue to work for the hundreds of millions of IE users who only Windows-based distributions reach. We’re constrained in the ability to build new standards into the Internet itself. In parts of the worlds — Asia in particular — we’re still highly constrained in our ability to even display web content, due to IE specific content.

And of course, the EC’s concern is not simply whether a single, unique “plant” like Mozilla can survive and prosper against all odds. The question is whether competition and innovation themselves are being harmed.

There’s no disagreement that technology is best developed by technologists and entrepreneurs rather than government.

Government does have a role to play in consumer protection. Governments regulate the formation of companies, they require disclosure for some companies, they regulate the quality of products. Some governments also protect consumers by identifying certain kinds of competitive activities as unacceptable.

One could say that competition laws in general are bad, or competition laws relating to monopolies are bad. Maybe that’s what the comments are saying. But when these laws exist, I don’t understand the argument that technology companies should be exempt.

2. Mozilla should not get involved with the EC.

I wonder if this argument stems from the belief that the EC will reverse course if Mozilla doesn’t get involved. This is flattering in a way, but it doesn’t reflect our experience. The EC has been looking at this case December of 2007 when Opera filed its complaint. The EC has made its decision to move forward without Mozilla involvement and it seems wildly speculative to me to think the EC depends on Mozilla.

This argument may also be a way of expressing concern over the potential remedies. As I noted in a prior post, I think it’s deeply unwise for Mozilla to sit out the remedy discussions and learn what the EC is thinking after a final decision.

It’s also possible this argument stems from the idea that Microsoft hasn’t done anything except compete. If one rejects the idea that there is any limit on corporate competitive behavior this idea makes sense. If one accepts that corporations — just like individual human beings — face some restrictions in how they pursue their competitive goals, then the picture of Microsoft’s activities that emerges becomes quite different.

Microsoft did not obtain its IE hegemony solely through competition on the merits of IE. A number of illegal activities were also involved in creating IE’s market dominence. At the end of this post I’ve included below some very brief excerpts from the US District Court Finding of Facts that describe some of these activities.

One might still wonder what the EC should do today as a result. But the idea that Microsoft is an innocent victim is deeply flawed.

” . . . Microsoft has done much more than develop innovative browsing software of commendable quality and offer it bundled with Windows at no additional charge. . . . . Microsoft forced those consumers who otherwise would have elected Navigator as their browser to either pay a substantial price (in the forms of downloading, installation, confusion, degraded system performance, and diminished memory capacity) or content themselves with Internet Explorer. . . . The ultimate result is that some innovations that would truly benefit consumers never occur for the sole reason that they do not coincide with Microsoft’s self-interest.”

A number of comments in the EC – Microsoft discussion have asked why Microsoft would be treated differently than everyone else, or shouldn’t be able to do whatever it wants with Windows.

Microsoft is treated differently because of the monopoly status of its Windows operating system. Having a monopoly position has enormous consequences, both business and legal. A monopoly exists when a single entity controls nearly all of the market for a given type of product. Or, to quote from Wikipedia “a monopoly . . . exists when a specific individual or enterprise has sufficient control over a particular product or service to determine significantly the terms on which other individuals shall have access to it.” By the mid-1990’s Microsoft Windows had over 90% market share for Intel-based personal computer operating systems, and was moving closer to 95%.

Being a monopoly has some great rewards for a company. It can mean very little pressure on price or quality, even for a critical product. But a monopolist is not free to do whatever it wants to protect its dominant market position. A variety of governments, including the EU, have concepts of unfair competition. These concepts include limits on what a monopolist like Microsoft can do. Both the EC and the US courts have found Microsoft guilty of engaging in impermissible activities with regard to its Windows monopoly.

So to answer the question, yes there is a reason for singling Microsoft out: it alone has a monopoly on (Intel based) personal computer operating systems.

If we drop the word “only” out of this sentence I suspect we have 100% agreement. Building the Internet that we want to live in is the fundamental reality of Mozilla. This is our shared purpose, and it’s what makes us effective.

But is building Firefox the only appropriate response to problems in the market? The EC has initiated action that is intimately and directly related to the world we are building. I believe we must get involved; that ignoring this is like “putting our head in the sand.”

At the very least we should offer our expertise to the EC. Competition in the browser space is important because it is critical to building an innovative, open and participatory web. We have experience in this area that is unusual if not unique. We have a chance to bring this expertise to the EC as it moves forward. I would feel remiss if Mozilla were to let this opportunity go by.

In my last post I listed a set of themes I’d like to address regarding the EC and Microsoft. I expect to post in roughly the order listed. But first I want to comment on the remedies issue briefly.

Most of the discussion of potential remedies focuses on either shipping Windows without a browser or on a “must-carry” requirement, which Microsoft described in its recent filing with the U.S. Securities and Exchange Commission. These may be the most obvious possible remedies, but they are not the only, or even necessarily the best possible remedies.

I think everyone agrees that a good remedy is difficult to craft. There’s great disagreement over whether it is appropriate to try. I’m going to describe in subsequent posts why I think it’s appropriate to offer Mozilla’s expertise to the EC rather than simply wait to see what happens.

It would also be good to have a wide-ranging discussion of possible remedies. We’ll undoubtedly find that most possible remedies are flawed, some so deeply that they might be worse than doing nothing. We may find some remedies that will improve the situation. I’m inclined to think this is the case, although I too understand the complexity of the setting. If that discussion hasn’t developed before I finish a couple of the posts I listed above, I’ll try to spark it with some suggestions.